AUD analysis 07.02.2020

The Australian dollar fell during the Asian session to witness its bounce for the third session from the top since January 29, while it is still in the process of its first weekly gains in six weeks against the US dollar after the developments and economic data that it had reported on the Australian economy, which included the certificate of the Governor of the Reserve Bank of Australia Philip Liu before the Australian Parliament and the disclosure of the minutes of the Bank of Australia meeting held last Tuesday and on the cusp of developments and economic data expected today Friday by the US economy, the largest economy in the world.

At 2:16 am GMT, the Australian dollar pair declined against the US dollar by 0.22% to 0.6715 levels compared to the opening levels at 0.6730, after the pair achieved its lowest level during the trading session at 0.6713, while the pair achieved its highest at 0.6736.

We have followed the Governor of the Australian Central Bank, Liu, in his semi-annual testimony before the Standing Committee of Economics in the House of Representatives in Canberra, expressed his expectations for the high rate of economic growth for his country from average to two percent in the past two years to two percent during this year and to three percent during 2021, Supported by the facilitation policy and the new phase of expansion in the resource sector, in addition to strong consumption and the recovery of residential investment.

Lowe also said that these expectations are also supported by a modest increase in global growth, adding that the world economy last year suffered from the uncertainty and interruption of international trade caused by trade and technology disputes between the United States and China, Australia's largest trading partner, and he explained that recently there are signs of stability And, his expectations are in line with the International Monetary Fund's expectation that current and next year growth is stronger than last year.

Lowe noted, however, that there are still some areas that reflect uncertainty, including the possibility of a resurgence of trade and protectionist trade disputes between Washington and Beijing, explaining that the "first stage" deal eased some of the previous uncertainties, while not eliminating the uncertainty about the outbreak of war Trade among them, and there are a number of other trade disputes that may escalate elsewhere around the world, adding that the spread of the Corona virus is a new source of uncertainty.

In conclusion, Lowe touched on the fact that forest fires and droughts had a devastating economic impact on the affected areas in addition to the tragic loss of lives. Reconstruction efforts largely offset this impact for the rest of this year, adding that the economy could lose 0.25% this year as a result of the disaster.

Lowe's testimony came in which he stressed that although there is a justification for expanding monetary policy easing, there are risks of lower interest rates, before we see the Reserve Bank of Australia unveil the monetary policy statement for the meeting held on the fourth of February The current process by which it was decided to keep interest rates at the lowest ever, at 0.75% for the third meeting in a row.

On the other hand, we have just followed the talk of a member of the Federal Open Market Committee and Deputy Governor of the Federal Reserve Randall Quarlis about monetary policy and economic expectations at New York University, and this came amid the markets' aspiration to reveal the data of the American labor market last month, which may reflect the stability of unemployment rates at The lowest in five decades at 3.5% for the third month in a row.

In the same context, investors are also looking to the US economy for the release of the employment change index for sectors other than agriculture, which may reflect the acceleration of the pace of job creation to 163,000 jobs compared to 145,000 jobs last December, as the average income index reading in The hour, growth accelerated to 0.3% versus 0.1%. This is before the final reading of the wholesale stocks index, which may explain the stability of the decline at 0.1%.

Technical analysis

The Australian dollar pair against the US dollar resumed its negative trades, gradually moving away from the 0.6754 level, which supports the continuation of our bearish expectations, which aims to test the 0.6670 level initially, noting that breaking this level will push the price to 0.6560 as the next main station.

Thus, the negative scenario will remain valid and active, provided stability is below 0.6754 and most importantly below 0.6825.

The expected trading range for today is between 0.6670 support and 0.6750 resistance.

Expected trend for today: bearish.